MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question."

Transcription

1 PRE TEST 2 - ECON 2013 SUMMER 2013 Name VERSION A - THIS IS INDIVIDUAL WORK - VERSION A MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) When an economy experiences significant economic growth: A) a direct relationship exists between output per capita and adult literacy rates. B) an indirect relationship exists between output per capita and adult literacy rates. C) a negative relationship exists between output per capita and adult literacy rates. D) no observed relationship exists between output per capita and adult literacy rates. 2) experience lower rates of unemployment than do. A) College graduates; high school graduates B) Adult females; adult males C) High school graduates; college graduates D) Black males; white males 3) If there was an increase in technology, real GDP growth would and real GDP growth per capita would : A) decrease; be indeterminate. B) increase; increase. C) increase; be indeterminate. D) decrease; decrease. 4) In any country, the population will generally be better off as long as the over time and population. A) quantity and quality of output increases; increases faster than real output B) quantity and quality of output decreases; does not increase faster than real output C) technology improves; increases faster than real output D) quantity and quality of output increases; does not increase faster than real output 5) Technology can enable producers to economize on: A) any of the above. B) land. C) labor. D) capital. 6) Economic growth is measured by the: A) rate of business investment and capital formation. B) marginal change in nominal output divided by total output from the previous year. C) annual percentage change in per capita real output of goods and services. D) advancement in the quality of a nation's technology. 7) If a large number of individuals file unemployment claims and work in the underground economy: A) the unemployment rate understates the level of unemployment. B) discouraged worker statistics will underestimate the true state of frustration by job seekers C) the unemployment rate overstates the level of unemployment. D) the unemployment rate is not affected. 8) The measure most commonly used by economists to gauge the standard of living of a nation is: A) labor productivity. B) real GDP. C) real GDP per capita. D) productivity of labor. A1A

2 9) The unemployment rate is the number of people classified as unemployed as a percentage of: A) the number of people over the age of sixteen who are employed. B) the entire population C) the population over the age of sixteen. D) the labor force. 10) Improvements in and greater stocks of land, labor, capital, and entrepreneurial activity will shift the production possibilities curve: A) outward, such that more goods and services can be produced. B) inward, such that the marketplace experiences a decrease in price and output levels. C) inward, because more resources will be used up and not renewed. D) outward, such that the cost-of-living rises. 11) Allowing free trade can lead to greater output because of the principle of: A) scarcity. B) absolute advantage. C) comparative advantage. D) rule of ) The cost incurred when individuals reduce their money holdings because of inflation is termed as the: A) implied cost. B) shoe-leather cost. C) menu cost. D) nominal cost. 13) The category of unemployment that is a byproduct of geographic and occupational mobility and not generally considered to be a serious problem is: A) underemployment. B) cyclical unemployment. C) structural unemployment. D) frictional unemployment. 14) Economists use the term "business cycle" to refer to: A) the growth of small businesses into major corporations. B) periods of increase or decrease in the rate of inflation. C) qualitative changes in products resulting from improved technology. D) fluctuations in economic activity, measured by GDP or unemployment. 15) The development of a nationwide computerized job bank listing of all job openings would be most likely to reduce: A) cyclical unemployment. B) seasonal unemployment. C) structural unemployment. D) frictional unemployment. 16) Improvements in literacy stimulate economic growth by: A) imparting skills, which raises labor productivity. B) reducing the barriers to the flow of information C) improving the flow of resources to more productive uses. D) doing all of the above. 17) Which of the following is an example of an intermediate good? A) a used Ford Mustang sold from one neighbor to another B) cloth sold to a suit manufacturer C) a pair of jeans sold by a clothing retailer D) a share of Wal-Mart stock A2A

3 18) Economists usually use the term "recession" to refer to: A) zero real GDP growth. B) a significant reduction in output and employment lasting more than a few months. C) any slowdown in the growth of real GDP. D) two or more consecutive quarters of declining real GDP. 19) The costs imposed on a firm from changing listed prices is termed: A) the nominal cost of inflation. B) the shoe-leather cost of inflation. C) the implied cost of inflation. D) the menu cost of inflation. 20) GDP is: A) the total value of all final goods and services plus intermediate goods and services produced domestically within a given period. B) the total value of all consumer expenditures within a given period. C) national income after taxes. D) the value of all final goods and services produced domestically within a given period. 21) An individual who voluntarily leaves one job and spends a period of time seeking another is considered: A) seasonally unemployed. B) frictionally unemployed. C) cyclically unemployed. D) structurally unemployed 22) Discouraged workers are defined as those: A) who are counted as frictionally unemployed, having become dissatisfied with their previous jobs. B) whose productivity is low because working in dead-end jobs reduces their morale. C) who have given up looking for a job and are not counted as unemployed. D) who are counted as structurally unemployed, lacking training for the skilled positions for which they are applying. 23) experience lower rates of unemployment than do. A) Black females; white females B) Teenagers; adults C) Skilled workers; unskilled workers D) Adult females; adult males 24) For a low-income country to develop into a high-income country, is (are) needed. A) a sustained and rapid expansion in the money supply B) tax breaks on consumption goods C) deflation D) sustained economic growth 25) Many scholars believe that the importance of research and development is understated. Efforts in research and development can include: A) production innovations. B) the introduction of new products. C) learning by doing. D) management improvements. E) any of the above. A3A

4 26) Final goods or services used to compute GDP refer to: A) the value of outstanding shares of stock of manufacturing firms. B) the factors of production used to produce output. C) goods and services purchased by the ultimate users. D) the sum of all wages paid to laborers. 27) Real gross domestic product is the total value of all: A) goods and services adjusted for inflation. B) final goods and services without adjustment for inflation. C) final goods and services adjusted for inflation. D) goods and services without an adjustment for inflation. 28) The unemployment rate may underestimate the true extent of unemployment if: A) any of the above occur. B) there are a large number of people working in the underground economy. C) employees increase the number of hours they work overtime. D) many part-time employees would like to work full-time, but are unable to get the additional work. 29) A fall in the price level produces a the aggregate supply curve. A) rightward shift of the aggregate supply curve and a movement downward along B) movement downward along C) movement upward along D) rightward shift of E) leftward shift of 30) A rise in the price level produces a the aggregate supply curve. A) movement upward along B) leftward shift of C) movement downward along D) rightward shift of E) rightward shift of the aggregate supply curve and a movement downward along 31) Inflation exists whenever: A) the overall price level is rising. B) the price of a good increases. C) the economy experiences a contraction. D) the price of a good decreases. 32) High rates of unemployment are undesirable because: A) they cause increased levels of societal tension. B) society loses potential production of goods and services C) families of the unemployed may find it difficult to survive. D) of all of the above. 33) New growth theorists believe that increased economic growth is driven by: A) increased foreign investment. B) higher level of capital investments. C) higher level of savings. D) technological innovation and ideas. 34) Which of the following categories account for the smallest fraction of unemployed workers? A) Job leavers B) Job losers C) Reentrants D) New entrants A4A

5 35) The unemployment rate measures: A) unemployed workers as a percentage of the population over the age of sixteen. B) the number of people unemployed divided by the number of people employed C) unemployed workers as a percentage of the population D) unemployed workers as a percentage of the labor force. 36) Which of the following refers to extremely high rates of inflation for sustained periods of time? A) bust B) deflation C) depression D) hyperinflation 37) A major macroeconomic goal of nearly every society is: A) achieving high rates of economic growth. B) maintaining stability of prices. C) maintaining high levels of employment. D) all of the above. 38) Education would be considered investments in: A) all of the above B) human capital C) financial capital D) physical capital 39) Moving along the aggregate supply curve, A) the quantity of capital used increases. B) the stock of human capital increases. C) only the price level changes. D) the real wage rate is constant. E) technology advances. 40) Intermediate products: A) produced domestically are reflected directly in a nation's GDP. B) produced domestically are not directly reflected in a nation's GDP. C) are goods that are purchased by the ultimate user. D) are imported retail products. 41) Which of the government policies below is not likely to encourage per capita economic growth? A) Special subsidies for capital-intensive forms of production B) The use of tax revenues for investment and capital formation C) Promotion of education and training programs for workers D) High taxes on companies that spend a lot on capital formation 42) A welder who quits his job and moves from Houston to Buffalo to try to get a better welding job is said to be: A) cyclically unemployed. B) structurally unemployed. C) underemployed. D) frictionally unemployed. 43) Underemployment occurs when: A) a worker is over qualified and possesses more skills than what his job demands. B) a firm hires workers who do not possess the required skills that the job demands. C) a firm hires more than the required number of workers. D) a firm hires fewer than the required number of workers, to save costs. A5A

6 44) An unanticipated increase in inflation will: A) redistribute income from employers to workers. B) redistribute income from lenders to borrowers. C) redistribute income from borrowers to lenders. D) do none of the above. 45) Kathryn chooses to go to college full-time rather than to work. Kathryn: A) is part of the labor force, but not actively seeking work. B) is part of the labor force and what economists call a discouraged worker C) is considered employed. D) is not part of the labor force. 46) The aggregate supply curve slopes because a in the price level brings a in the real wage rate. A) upward; rise; rise B) downward; fall; rise C) upward; fall; fall D) downward; rise; rise E) upward; rise; fall 47) The prosperity of a nation today is typically measured by its: A) output per capita B) total output or gross national product. C) gold reserves. D) proportionate share of international trade 48) Unemployment resulting from normal turnover in the labor market is called: A) cyclical unemployment. B) structural unemployment. C) season unemployment. D) frictional unemployment. 49) Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking. What would happen to the unemployment rate? A) It would change, but the effect cannot be predicted. B) It would not change. C) It would increase. D) It would fall. 50) An unanticipated period of deflation will: A) redistribute income from lenders to borrowers. B) redistribute income from workers to employers. C) redistribute income from borrowers to lenders D) do none of the above. A6A

CHAPTER 8. Practise Problems

CHAPTER 8. Practise Problems CHAPTER 8 Practise Problems 1. The labor force is: A) the total of people employed. B) the total population. C) the total of the population of working age. D) the total of people employed and unemployed.

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Suvey of Macroeconomics, MBA 641 Fall 2006, Final Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Modern macroeconomics emerged from

More information

Principles of Macroeconomics Prof. Yamin Ahmad ECON 202 Fall 2004

Principles of Macroeconomics Prof. Yamin Ahmad ECON 202 Fall 2004 Principles of Macroeconomics Prof. Yamin Ahmad ECON 202 Fall 2004 Sample Final Exam Name Id # Part B Instructions: Please answer in the space provided and circle your answer on the question paper as well.

More information

Answer: A. Answer: A.16. Use the following to answer questions 6-9:

Answer: A. Answer: A.16. Use the following to answer questions 6-9: 1. The rate of economic growth is best defined as the: A) percentage increase in real GDP over time. B) increase in investment as a percentage of GDP over time. C) percentage increase in consumption expenditures

More information

THE ECONOMY AT FULL EMPLOYMENT: THE CLASSICAL MODEL*

THE ECONOMY AT FULL EMPLOYMENT: THE CLASSICAL MODEL* Chapter 8 THE ECONOMY AT FULL EMPLOYMENT: THE CLASSICAL MODEL* The Classical Model: A Preview Topic: Real Variables 1) Real variables A) are those that determine the cost of living. B) are those that determine

More information

Unemployment and Inflation

Unemployment and Inflation Unemployment and Inflation Unemployment Inflation Costs of Unemployment Personal Cost Loss of income Loss of self-esteem Increase in stress related psychological problems Increase in incidence of crime,

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Econ 111 Summer 2007 Final Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The classical dichotomy allows us to explore economic growth

More information

ECON 1010 Principles of Macroeconomics Exam #2. Section A: Multiple Choice Questions. (30 points; 2 pts each)

ECON 1010 Principles of Macroeconomics Exam #2. Section A: Multiple Choice Questions. (30 points; 2 pts each) ECON 1010 Principles of Macroeconomics Exam #2 Section A: Multiple Choice Questions. (30 points; 2 pts each) #1. If the price level in the economy and the nominal wages both doubled, then real wages would

More information

Chapter: Practice Exam for Macro Indicators. Instruction: Name: Date: Multiple Choice

Chapter: Practice Exam for Macro Indicators. Instruction: Name: Date: Multiple Choice Chapter: Practice Exam for Macro Indicators Instruction: Name: Date: Multiple Choice 1. GDP does not include A) vegetables grown and consumed by a nonfarm family. B) the purchase of a new Porsche. C) the

More information

INTRODUCTION TO MACROECONOMICS MIDTERM- SAMPLE QUESTIONS

INTRODUCTION TO MACROECONOMICS MIDTERM- SAMPLE QUESTIONS INTRODUCTION TO MACROECONOMICS MIDTERM- SAMPLE QUESTIONS MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In May 2009, Ford Motor Company's sales

More information

Economics 212 Principles of Macroeconomics Study Guide. David L. Kelly

Economics 212 Principles of Macroeconomics Study Guide. David L. Kelly Economics 212 Principles of Macroeconomics Study Guide David L. Kelly Department of Economics University of Miami Box 248126 Coral Gables, FL 33134 dkelly@miami.edu First Version: Spring, 2006 Current

More information

Macroeconomics Instructor: Jen Dinsmore Hanson Homework Assignment Chapter 9. Multiple Choice Questions

Macroeconomics Instructor: Jen Dinsmore Hanson Homework Assignment Chapter 9. Multiple Choice Questions Macroeconomics Instructor: Jen Dinsmore Hanson Homework Assignment Chapter 9 Multiple Choice Questions 1. Net domestic product is usually preferred to GDP by economists because net national product A.

More information

Households Wages, profit, interest, rent = $750. Factor markets. Wages, profit, interest, rent = $750

Households Wages, profit, interest, rent = $750. Factor markets. Wages, profit, interest, rent = $750 KrugmanMacro_SM_Ch07.qxp 11/9/05 4:47 PM Page 87 Tracking the Macroeconomy 1. Below is a simplified circular-flow diagram for the economy of Micronia. a. What is the value of GDP in Micronia? b. What is

More information

Macroeconomics, 10e, Global Edition (Parkin) Chapter 24 Finance, Saving, and Investment. 1 Financial Institutions and Financial Markets

Macroeconomics, 10e, Global Edition (Parkin) Chapter 24 Finance, Saving, and Investment. 1 Financial Institutions and Financial Markets Macroeconomics, 10e, Global Edition (Parkin) Chapter 24 Finance, Saving, and Investment 1 Financial Institutions and Financial Markets 1) The term "capital," as used in macroeconomics, refers to A) the

More information

Introduction to Macroeconomics. TOPIC 1: Introduction, definition, measures

Introduction to Macroeconomics. TOPIC 1: Introduction, definition, measures TOPIC 1: Introduction, definitions, measures Annaïg Morin CBS - Department of Economics August 2013 What is macroeconomics about? Understanding the behavior of an economy as a whole. studying aggregated

More information

Chapter 13. Aggregate Demand and Aggregate Supply Analysis

Chapter 13. Aggregate Demand and Aggregate Supply Analysis Chapter 13. Aggregate Demand and Aggregate Supply Analysis Instructor: JINKOOK LEE Department of Economics / Texas A&M University ECON 203 502 Principles of Macroeconomics In the short run, real GDP and

More information

This is the on-line Multiple Choice Quiz for Chapter 4. Please do the following. Go to the special codes section on your score sheet

This is the on-line Multiple Choice Quiz for Chapter 4. Please do the following. Go to the special codes section on your score sheet Instructions: This is the on-line Multiple Choice Quiz for Chapter 4. Please do the following. Step I - Go to the special codes section on your score sheet Write your section number (1, or 4, or 5) under

More information

Chapter 11: Activity

Chapter 11: Activity Economics for Managers by Paul Farnham Chapter 11: Measuring Macroeconomic Activity 11.1 Measuring Gross Domestic Product (GDP) GDP: the market value of all currently yproduced final goods and services

More information

Chapter 12 Unemployment and Inflation

Chapter 12 Unemployment and Inflation Chapter 12 Unemployment and Inflation Multiple Choice Questions 1. The origin of the idea of a trade-off between inflation and unemployment was a 1958 article by (a) A.W. Phillips. (b) Edmund Phelps. (c)

More information

CHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY

CHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY CHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY Learning goals of this chapter: What forces bring persistent and rapid expansion of real GDP? What causes inflation? Why do we have business cycles? How

More information

I. MULTIPLE CHOICES. Choose the one alternative that best completes the statement to answer the question.

I. MULTIPLE CHOICES. Choose the one alternative that best completes the statement to answer the question. Econ 20B- Additional Problem Set I. MULTIPLE CHOICES. Choose the one alternative that best completes the statement to answer the question. 1. Which of the following is correct? a. Over the business cycle

More information

13.1 Unemployment Objectives

13.1 Unemployment Objectives 13.1 Unemployment Objectives Distinguish among four types of unemployment. Discuss the unemployment rate, and describe how it differs over time and across groups. Explain who is eligible for unemployment

More information

4. The statistics and data on unemployment are gathered and reported: A) daily. B) weekly. C) monthly. D) yearly.

4. The statistics and data on unemployment are gathered and reported: A) daily. B) weekly. C) monthly. D) yearly. Exam 1 inclass review for exam 1 (2) 1. To be counted as unemployed, one must: A) have had a job previously. B) be out of work and be actively looking for a job. C) have had a job before and be actively

More information

The Circular Flow of Income and Expenditure

The Circular Flow of Income and Expenditure The Circular Flow of Income and Expenditure Imports HOUSEHOLDS Savings Taxation Govt Exp OTHER ECONOMIES GOVERNMENT FINANCIAL INSTITUTIONS Factor Incomes Taxation Govt Exp Consumer Exp Exports FIRMS Capital

More information

Chapter 5 Measuring Economic Activity: GDP and Unemployment

Chapter 5 Measuring Economic Activity: GDP and Unemployment Chapter 5 Measuring Economic Activity: GDP and Unemployment Overview This chapter looks in detail at how economists measure two major macroeconomic variables: gross domestic product (GDP) and the unemployment

More information

CHAPTER 5: MEASURING GDP AND ECONOMIC GROWTH

CHAPTER 5: MEASURING GDP AND ECONOMIC GROWTH CHAPTER 5: MEASURING GDP AND ECONOMIC GROWTH Learning Goals for this Chapter: To know what we mean by GDP and to use the circular flow model to explain why GDP equals aggregate expenditure and aggregate

More information

Pre-Test Chapter 11 ed17

Pre-Test Chapter 11 ed17 Pre-Test Chapter 11 ed17 Multiple Choice Questions 1. Built-in stability means that: A. an annually balanced budget will offset the procyclical tendencies created by state and local finance and thereby

More information

2 0 0 0 E D I T I O N CLEP O F F I C I A L S T U D Y G U I D E. The College Board. College Level Examination Program

2 0 0 0 E D I T I O N CLEP O F F I C I A L S T U D Y G U I D E. The College Board. College Level Examination Program 2 0 0 0 E D I T I O N CLEP O F F I C I A L S T U D Y G U I D E College Level Examination Program The College Board Principles of Macroeconomics Description of the Examination The Subject Examination in

More information

FISCAL POLICY* Chapter. Key Concepts

FISCAL POLICY* Chapter. Key Concepts Chapter 11 FISCAL POLICY* Key Concepts The Federal Budget The federal budget is an annual statement of the government s expenditures and tax revenues. Using the federal budget to achieve macroeconomic

More information

Review Questions... CHAPTER 7

Review Questions... CHAPTER 7 Review Questions... CHAPTER 7 1. Suppose that over the course of a year 100 people are unemployed for 4 weeks each (the short-term unemployed), while 10 people are unemployed for 52 weeks each (the longterm

More information

Multiple Choice Identify the choice that best completes the statement or answers the question.

Multiple Choice Identify the choice that best completes the statement or answers the question. Unit 2 review Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Which of the following is false about the circular-flow diagram? A. Households are the primary

More information

ECON 3312 Macroeconomics Exam 3 Fall 2014. Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

ECON 3312 Macroeconomics Exam 3 Fall 2014. Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. ECON 3312 Macroeconomics Exam 3 Fall 2014 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Everything else held constant, an increase in net

More information

PRINCIPLES OF MACROECONOMICS. Chapter 28 Unemployment

PRINCIPLES OF MACROECONOMICS. Chapter 28 Unemployment PRINCIPLES OF MACROECONOMICS Chapter 28 Unemployment Overview In this chapter, we will examine broadly the labor market and see how full utilization of our labor resources improves the level of production

More information

HW 2 Macroeconomics 102 Due on 06/12

HW 2 Macroeconomics 102 Due on 06/12 HW 2 Macroeconomics 102 Due on 06/12 1.What are the three important macroeconomic goals about which most economists, and society at large, agree? a. economic growth, full employment, and low interest rates

More information

Pre-Test Chapter 7 ed17

Pre-Test Chapter 7 ed17 Pre-Test Chapter 7 ed17 Multiple Choice Questions 1. Real GDP per capita: A. cannot grow more rapidly than real GDP. B. cannot grow more slowly than real GDP. C. necessarily grows more rapidly than real

More information

Exam 1 Review. 3. A severe recession is called a(n): A) depression. B) deflation. C) exogenous event. D) market-clearing assumption.

Exam 1 Review. 3. A severe recession is called a(n): A) depression. B) deflation. C) exogenous event. D) market-clearing assumption. Exam 1 Review 1. Macroeconomics does not try to answer the question of: A) why do some countries experience rapid growth. B) what is the rate of return on education. C) why do some countries have high

More information

BUSINESS ECONOMICS CEC2 532-751 & 761

BUSINESS ECONOMICS CEC2 532-751 & 761 BUSINESS ECONOMICS CEC2 532-751 & 761 PRACTICE MACROECONOMICS MULTIPLE CHOICE QUESTIONS Warning: These questions have been posted to give you an opportunity to practice with the multiple choice format

More information

Econ 202 Section 4 Final Exam

Econ 202 Section 4 Final Exam Douglas, Fall 2009 December 15, 2009 A: Special Code 00004 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 4 Final Exam 1. Oceania buys $40

More information

BADM 527, Fall 2013. Midterm Exam 2. Multiple Choice: 3 points each. Answer the questions on the separate bubble sheet. NAME

BADM 527, Fall 2013. Midterm Exam 2. Multiple Choice: 3 points each. Answer the questions on the separate bubble sheet. NAME BADM 527, Fall 2013 Name: Midterm Exam 2 November 7, 2013 Multiple Choice: 3 points each. Answer the questions on the separate bubble sheet. NAME 1. According to classical theory, national income (Real

More information

Macroeconomia Capitolo 7. Seguire l andamento della macroeconomia. What you will learn in this chapter:

Macroeconomia Capitolo 7. Seguire l andamento della macroeconomia. What you will learn in this chapter: Macroeconomia Capitolo 7 Seguire l andamento della macroeconomia PowerPoint Slides by Can Erbil 2006 Worth Publishers, all rights reserved What you will learn in this chapter: How economists use aggregate

More information

The Aggregate Demand- Aggregate Supply (AD-AS) Model

The Aggregate Demand- Aggregate Supply (AD-AS) Model The AD-AS Model The Aggregate Demand- Aggregate Supply (AD-AS) Model Chapter 9 The AD-AS Model addresses two deficiencies of the AE Model: No explicit modeling of aggregate supply. Fixed price level. 2

More information

Suggested Answers for Mankiw Questions for Review & Problems

Suggested Answers for Mankiw Questions for Review & Problems Suggested Answers for Mankiw & Problems The answers here will not have graphs, I encourage to refer to the text for graphs. There is a some math, however I don t expect you to replicate these in your exam,

More information

Government Budget and Fiscal Policy CHAPTER

Government Budget and Fiscal Policy CHAPTER Government Budget and Fiscal Policy 11 CHAPTER The National Budget The national budget is the annual statement of the government s expenditures and tax revenues. Fiscal policy is the use of the federal

More information

Chapter 24. What will you learn in this chapter? Valuing an economy. Measuring the Wealth of Nations

Chapter 24. What will you learn in this chapter? Valuing an economy. Measuring the Wealth of Nations Chapter 24 Measuring the Wealth of Nations 2014 by McGraw-Hill Education 1 What will you learn in this chapter? How to calculate gross domestic product (GDP). Why each component of GDP is important. What

More information

7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Chapter. Key Concepts

7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Chapter. Key Concepts Chapter 7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Key Concepts Aggregate Supply The aggregate production function shows that the quantity of real GDP (Y ) supplied depends on the quantity of labor (L ),

More information

7. Which of the following is a flow variable? A) wealth B) the number unemployed C) government debt D) income

7. Which of the following is a flow variable? A) wealth B) the number unemployed C) government debt D) income Name: Date: 1. GDP is all of the following except the total: A) expenditure of everyone in the economy. B) income of everyone in the economy. C) expenditure on the economy's output of goods and services.

More information

Pre-Test Chapter 16 ed17

Pre-Test Chapter 16 ed17 Pre-Test Chapter 16 ed17 Multiple Choice Questions 1. Suppose total output (real GDP) is $4000 and labor productivity is 8. We can conclude that: A. real GDP per capita must be $500. B. the price-level

More information

ECONOMIC GROWTH* Chapter. Key Concepts

ECONOMIC GROWTH* Chapter. Key Concepts Chapter 5 MEASURING GDP AND ECONOMIC GROWTH* Key Concepts Gross Domestic Product Gross domestic product, GDP, is the market value of all the final goods and services produced within in a country in a given

More information

Assignment #3. ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma. Notice:

Assignment #3. ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma. Notice: ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Assignment #3 Notice: (1) There are 25 multiple-choice problems and 2 analytic (short-answer) problems. This assignment is due on March

More information

INTRODUCTION AGGREGATE DEMAND MACRO EQUILIBRIUM MACRO EQUILIBRIUM THE DESIRED ADJUSTMENT THE DESIRED ADJUSTMENT

INTRODUCTION AGGREGATE DEMAND MACRO EQUILIBRIUM MACRO EQUILIBRIUM THE DESIRED ADJUSTMENT THE DESIRED ADJUSTMENT Chapter 9 AGGREGATE DEMAND INTRODUCTION The Great Depression was a springboard for the Keynesian approach to economic policy. Keynes asked: What are the components of aggregate demand? What determines

More information

At the end of Chapter 10, you will be able to answer the following:

At the end of Chapter 10, you will be able to answer the following: 1 Objectives for Chapter 10 The Circular Flow Model At the end of Chapter 10, you will be able to answer the following: 1. Explain the basic circular flow model. 2. Define "consumption" and "saving" 3.

More information

Macroeconomics Instructor Miller GDP Practice Problems

Macroeconomics Instructor Miller GDP Practice Problems Macroeconomics Instructor Miller GDP Practice Problems 1. Gross domestic product in the economy is measured by the A) total number of goods and services produced in the economy. B) dollar value of all

More information

Chapter 12: Gross Domestic Product and Growth Section 1

Chapter 12: Gross Domestic Product and Growth Section 1 Chapter 12: Gross Domestic Product and Growth Section 1 Key Terms national income accounting: a system economists use to collect and organize macroeconomic statistics on production, income, investment,

More information

Chapter 6 Economic Growth

Chapter 6 Economic Growth Chapter 6 Economic Growth 1 The Basics of Economic Growth 1) The best definition for economic growth is A) a sustained expansion of production possibilities measured as the increase in real GDP over a

More information

MEASURING GDP AND ECONOMIC GROWTH*

MEASURING GDP AND ECONOMIC GROWTH* Chapter 5 MEASURING GDP AND ECONOMIC GROWTH* Gross Domestic Product Topic: GDP 1) Gross domestic product is the total produced within a country in a given time period. A) market value of all final and

More information

The labor market. National and local labor markets. Internal labor markets. Primary and secondary labor markets. Labor force and unemployment

The labor market. National and local labor markets. Internal labor markets. Primary and secondary labor markets. Labor force and unemployment The labor market The labor market differs from most product markets in several important ways. Among these differences are: labor services are rented, not sold, labor productivity is affected by pay and

More information

CHAPTER 9 Building the Aggregate Expenditures Model

CHAPTER 9 Building the Aggregate Expenditures Model CHAPTER 9 Building the Aggregate Expenditures Model Topic Question numbers 1. Consumption function/apc/mpc 1-42 2. Saving function/aps/mps 43-56 3. Shifts in consumption and saving functions 57-72 4 Graphs/tables:

More information

Cosumnes River College Principles of Macroeconomics Problem Set 3 Due September 17, 2015

Cosumnes River College Principles of Macroeconomics Problem Set 3 Due September 17, 2015 Cosumnes River College Principles of Macroeconomics Problem Set 3 Due September 17, 2015 Name: Solutions Fall 2015 Prof. Dowell Instructions: Write the answers clearly and concisely on these sheets in

More information

The level of price and inflation Real GDP: the values of goods and services measured using a constant set of prices

The level of price and inflation Real GDP: the values of goods and services measured using a constant set of prices Chapter 2: Key Macroeconomics Variables ECON2 (Spring 20) 2 & 4.3.20 (Tutorial ) National income accounting Gross domestic product (GDP): The market value of all final goods and services produced within

More information

Effects of Inflation Unanticipated Inflation in the Labor Market

Effects of Inflation Unanticipated Inflation in the Labor Market Effects of Inflation Unanticipated Inflation in the Labor Market Unanticipated inflation has two main consequences in the labor market: Redistribution of income Departure from full employment Effects of

More information

Measuring GDP and Economic Growth

Measuring GDP and Economic Growth 20 Measuring GDP and Economic Growth After studying this chapter you will be able to Define GDP and explain why GDP equals aggregate expenditure and aggregate income Explain how Statistics Canada measures

More information

University of Lethbridge Department of Economics ECON 1012 Introduction to Microeconomics Instructor: Michael G. Lanyi. Chapter 22 Economic Growth

University of Lethbridge Department of Economics ECON 1012 Introduction to Microeconomics Instructor: Michael G. Lanyi. Chapter 22 Economic Growth University of Lethbridge Department of Economics ECON 1012 Introduction to Microeconomics Instructor: Michael G. Lanyi Chapter 22 Economic Growth 1) Economic growth is A) equal to real GDP per capita multiplied

More information

Tutor2u Economics Essay Plans Summer 2002

Tutor2u Economics Essay Plans Summer 2002 Macroeconomics Revision Essay Plan (2): Inflation and Unemployment and Economic Policy (a) Explain why it is considered important to control inflation (20 marks) (b) Discuss how a government s commitment

More information

Labor Demand The Labor Market

Labor Demand The Labor Market Labor Demand The Labor Market 1. Labor demand 2. Labor supply Assumptions Hold capital stock fixed (for now) Workers are all alike. We are going to ignore differences in worker s aptitudes, skills, ambition

More information

MEASURING GDP AND ECONOMIC GROWTH CHAPTER

MEASURING GDP AND ECONOMIC GROWTH CHAPTER MEASURING GDP AND ECONOMIC GROWTH CHAPTER Objectives After studying this chapter, you will able to Define GDP and use the circular flow model to explain why GDP equals aggregate expenditure and aggregate

More information

Economics 152 Solution to Sample Midterm 1

Economics 152 Solution to Sample Midterm 1 Economics 152 Solution to Sample Midterm 1 N. Das PART 1 (81 POINTS):Answer the following 27 multiple choice questions on the scan sheet. Each question is worth 3 points). 1. Gross domestic product (GDP)

More information

Econ 202 Final Exam. Table 3-1 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher 4 5

Econ 202 Final Exam. Table 3-1 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher 4 5 Econ 202 Final Exam 1. If inflation expectations rise, the short-run Phillips curve shifts a. right, so that at any inflation rate unemployment is higher. b. left, so that at any inflation rate unemployment

More information

Miami Dade College ECO 2013.003 Principles of Macroeconomics - Fall 2014 Practice Test #2

Miami Dade College ECO 2013.003 Principles of Macroeconomics - Fall 2014 Practice Test #2 Miami Dade College ECO 2013.003 Principles of Macroeconomics - Fall 2014 Practice Test #2 1. Whose analysis serves as the foundation of modern macroeconomics? A) Milton Friedman B) John Maynard Keynes

More information

CHAPTER 23 FISCAL POLICY: COPING WITH INFLATION AND UNEMPLOYMENT

CHAPTER 23 FISCAL POLICY: COPING WITH INFLATION AND UNEMPLOYMENT CHAPTER 23 FISCAL POLICY: COPING WITH INFLATION AND UNEMPLOYMENT Chapter in a Nutshell To say that an economy is in equilibrium tells us very little about the general state of the economy. The model showing

More information

6. Real GDP means the value of goods and services is measured in prices. A) current B) actual C) constant D) average

6. Real GDP means the value of goods and services is measured in prices. A) current B) actual C) constant D) average Name: Date: 1. Assume that total output consists of 4 apples and 6 oranges and that apples cost $1 each and oranges cost $0.50 each. In this case, the value of GDP is: A) 10 pieces of fruit. B) $7. C)

More information

2. With an MPS of.4, the MPC will be: A) 1.0 minus.4. B).4 minus 1.0. C) the reciprocal of the MPS. D).4. Answer: A

2. With an MPS of.4, the MPC will be: A) 1.0 minus.4. B).4 minus 1.0. C) the reciprocal of the MPS. D).4. Answer: A 1. If Carol's disposable income increases from $1,200 to $1,700 and her level of saving increases from minus $100 to a plus $100, her marginal propensity to: A) save is three-fifths. B) consume is one-half.

More information

Macroeconomics Topic 8: Explain how slow price adjustments might affect the short-run response of the economy to economic shocks.

Macroeconomics Topic 8: Explain how slow price adjustments might affect the short-run response of the economy to economic shocks. Macroeconomics Topic 8: Explain how slow price adjustments might affect the short-run response of the economy to economic shocks. Reference: Gregory Mankiw s Principles of Microeconomics, 2 nd edition,

More information

MEASURING A NATION S INCOME

MEASURING A NATION S INCOME 10 MEASURING A NATION S INCOME WHAT S NEW IN THE FIFTH EDITION: There is more clarification on the GDP deflator. The Case Study on Who Wins at the Olympics? is now an FYI box. LEARNING OBJECTIVES: By the

More information

Econ 303: Intermediate Macroeconomics I Dr. Sauer Sample Questions for Exam #3

Econ 303: Intermediate Macroeconomics I Dr. Sauer Sample Questions for Exam #3 Econ 303: Intermediate Macroeconomics I Dr. Sauer Sample Questions for Exam #3 1. When firms experience unplanned inventory accumulation, they typically: A) build new plants. B) lay off workers and reduce

More information

EC2105, Professor Laury EXAM 2, FORM A (3/13/02)

EC2105, Professor Laury EXAM 2, FORM A (3/13/02) EC2105, Professor Laury EXAM 2, FORM A (3/13/02) Print Your Name: ID Number: Multiple Choice (32 questions, 2.5 points each; 80 points total). Clearly indicate (by circling) the ONE BEST response to each

More information

I. Introduction to Aggregate Demand/Aggregate Supply Model

I. Introduction to Aggregate Demand/Aggregate Supply Model University of California-Davis Economics 1B-Intro to Macro Handout 8 TA: Jason Lee Email: jawlee@ucdavis.edu I. Introduction to Aggregate Demand/Aggregate Supply Model In this chapter we develop a model

More information

Measuring a Nation s Income

Measuring a Nation s Income Measuring a Nation s Income I. Review of the Definitions of Microeconomics and Macroeconomics A. Definition of microeconomics: the study of how households and firms make decisions and how they interact

More information

Solutions to Problem Set #2 Spring, 2013. 1.a) Units of Price of Nominal GDP Real Year Stuff Produced Stuff GDP Deflator GDP

Solutions to Problem Set #2 Spring, 2013. 1.a) Units of Price of Nominal GDP Real Year Stuff Produced Stuff GDP Deflator GDP Economics 1021, Section 1 Prof. Steve Fazzari Solutions to Problem Set #2 Spring, 2013 1.a) Units of Price of Nominal GDP Real Year Stuff Produced Stuff GDP Deflator GDP 2003 500 $20 $10,000 95.2 $10,504

More information

Chapter 12. Aggregate Expenditure and Output in the Short Run

Chapter 12. Aggregate Expenditure and Output in the Short Run Chapter 12. Aggregate Expenditure and Output in the Short Run Instructor: JINKOOK LEE Department of Economics / Texas A&M University ECON 203 502 Principles of Macroeconomics Aggregate Expenditure (AE)

More information

Professor Christina Romer. LECTURE 17 MACROECONOMIC VARIABLES AND ISSUES March 17, 2016

Professor Christina Romer. LECTURE 17 MACROECONOMIC VARIABLES AND ISSUES March 17, 2016 Economics 2 Spring 2016 Professor Christina Romer Professor David Romer LECTURE 17 MACROECONOMIC VARIABLES AND ISSUES March 17, 2016 I. MACROECONOMICS VERSUS MICROECONOMICS II. REAL GDP A. Definition B.

More information

Chapter 3 Productivity, Output, and Employment

Chapter 3 Productivity, Output, and Employment Chapter 3 Productivity, Output, and Employment Multiple Choice Questions 1. A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the (a) real

More information

Macroeconomics 2301 Potential questions and study guide for exam 2. Any 6 of these questions could be on your exam!

Macroeconomics 2301 Potential questions and study guide for exam 2. Any 6 of these questions could be on your exam! Macroeconomics 2301 Potential questions and study guide for exam 2 Any 6 of these questions could be on your exam! 1. GDP is a key concept in Macroeconomics. a. What is the definition of GDP? b. List and

More information

Econ 102 Aggregate Supply and Demand

Econ 102 Aggregate Supply and Demand Econ 102 ggregate Supply and Demand 1. s on previous homework assignments, turn in a news article together with your summary and explanation of why it is relevant to this week s topic, ggregate Supply

More information

AP Macroeconomics. Practice Exam. Advanced Placement Program

AP Macroeconomics. Practice Exam. Advanced Placement Program Advanced Placement Program AP Macroeconomics Practice Exam The questions contained in this AP Macroeconomics Practice Exam are written to the content specifications of AP Exams for this subject. Taking

More information

Reference: Gregory Mankiw s Principles of Macroeconomics, 2 nd edition, Chapters 10 and 11. Gross Domestic Product

Reference: Gregory Mankiw s Principles of Macroeconomics, 2 nd edition, Chapters 10 and 11. Gross Domestic Product Macroeconomics Topic 1: Define and calculate GDP. Understand the difference between real and nominal variables (e.g., GDP, wages, interest rates) and know how to construct a price index. Reference: Gregory

More information

Labor Market and Unemployment Ing. Mansoor Maitah Ph.D.

Labor Market and Unemployment Ing. Mansoor Maitah Ph.D. Labor Market and Unemployment Ing. Mansoor Maitah Ph.D. Product and Factor Markets Demand for Goods and Services Market of Goods and Services S D Supply of Goods and Services Households Firms Supply of

More information

Pre-Test Chapter 6 ed17 2

Pre-Test Chapter 6 ed17 2 Pre-Test Chapter 6 ed17 2 Multiple Choice Questions 1. (Last Word) The U.S. government agency responsible for compiling the national income accounts is the: A. Census Bureau. B. Bureau of Labor Statistics

More information

LECTURE NOTES ON MACROECONOMIC PRINCIPLES

LECTURE NOTES ON MACROECONOMIC PRINCIPLES LECTURE NOTES ON MACROECONOMIC PRINCIPLES Peter Ireland Department of Economics Boston College peter.ireland@bc.edu http://www2.bc.edu/peter-ireland/ec132.html Copyright (c) 2013 by Peter Ireland. Redistribution

More information

Pre-Test Chapter 10 ed17

Pre-Test Chapter 10 ed17 Pre-Test Chapter 10 ed17 Multiple Choice Questions 1. Refer to the above diagrams. Assuming a constant price level, an increase in aggregate expenditures from AE 1 to AE 2 would: A. move the economy from

More information

* * * 8 NATIONAL INCOME. Unit 1 : National Income Analysis

* * * 8 NATIONAL INCOME. Unit 1 : National Income Analysis 8 NATIONAL INCOME Macro / Topic 8-1 / P. 1 Unit 1 : National Income Analysis I Concepts and Meaning ( Definition ) II Approaches and Formulae III Measurement of GNP IV Economic Analysis of GNP National

More information

The Circular Flow 1/15/2013. Gross Domestic Product: Expenditure and Income

The Circular Flow 1/15/2013. Gross Domestic Product: Expenditure and Income IN THIS CHAPTER, YOU WILL LEARN: ECON 3010 Intermediate Macroeconomics Chapter 2 The Data of Macroeconomics the meaning and measurement of the most important macroeconomic statistics: gross domestic product

More information

FISCAL POLICY* Chapter. Key Concepts

FISCAL POLICY* Chapter. Key Concepts Chapter 15 FISCAL POLICY* Key Concepts The Federal Budget The federal budget is an annual statement of the government s expenditures and tax revenues. Using the federal budget to achieve macroeconomic

More information

Econ 202 Section 2 Final Exam

Econ 202 Section 2 Final Exam Douglas, Fall 2009 December 17, 2009 A: Special Code 0000 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 2 Final Exam 1. The present value

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Of the four players in the money supply process, most observers agree that the most important player

More information

Economics. Total marks 100

Economics. Total marks 100 2012 HIGHER SCHOOL CERTIFICATE EXAMINATION Economics Total marks 100 Section I Pages 2 8 20 marks Attempt Questions 1 20 Allow about 35 minutes for this section General Instructions Reading time 5 minutes

More information

A HOW-TO GUIDE: UNDERSTANDING AND MEASURING INFLATION

A HOW-TO GUIDE: UNDERSTANDING AND MEASURING INFLATION A HOW-TO GUIDE: UNDERSTANDING AND MEASURING INFLATION By Jim Stanford Canadian Centre for Policy Alternatives, 2008 Non-commercial use and reproduction, with appropriate citation, is authorized. This guide

More information

CHAPTER 20 GROSS DOMESTIC PRODUCT ACCOUNTING

CHAPTER 20 GROSS DOMESTIC PRODUCT ACCOUNTING CHAPTER 20 GROSS DOMESTIC PRODUCT ACCOUNTING Chapter in a Nutshell Gross domestic product was introduced in the previous chapter as a basic measure of macroeconomic performance. This chapter identifies

More information

Extra Problems #3. ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma. Notice:

Extra Problems #3. ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma. Notice: ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Extra Problems #3 Notice: (1) There are 25 multiple-choice problems covering Chapter 6, 9, 10, 11. These problems are not homework and

More information

Big Concepts. Measuring U.S. GDP. The Expenditure Approach. Economics 202 Principles Of Macroeconomics

Big Concepts. Measuring U.S. GDP. The Expenditure Approach. Economics 202 Principles Of Macroeconomics Lecture 6 Economics 202 Principles Of Macroeconomics Measuring GDP Professor Yamin Ahmad Real GDP and the Price Level Economic Growth and Welfare Big Concepts Ways to Measure GDP Expenditure Approach Income

More information

University of Lethbridge Department of Economics ECON 1012 Introduction to Microeconomics Instructor: Michael G. Lanyi. Chapter 29 Fiscal Policy

University of Lethbridge Department of Economics ECON 1012 Introduction to Microeconomics Instructor: Michael G. Lanyi. Chapter 29 Fiscal Policy University of Lethbridge Department of Economics ECON 1012 Introduction to Microeconomics Instructor: Michael G. Lanyi Chapter 29 Fiscal Policy 1) If revenues exceed outlays, the government's budget balance

More information